'Really Un-Tethered?' Bitcoin Price Manipulation Returns With New Research

Evidence suggests that Tether may have been used to manipulate the price of bitcoin

Tether [USDT], one of the most traded cryptocurrencies supported by platforms like Bitfinix, ShapeShift, Bittrex, and Omni, shows an indication of being spent on Bitcoin in its critical moments, according to research by a University of Texas professor.

What is interesting is that Griffin and Shams's paper describes Tether as being primarily used by Bitfinex, a major crypto-exchange, to purchase Bitcoin tokens from two other exchanges and most importantly did this only after periods of Bitcoin price declines.

"Tether seems to be used both to stabilize and manipulate Bitcoin prices", the researchers wrote. The Commodity Futures Trading Commission and the U.S. Department of Justice have been investigating whether bitcoin and other cryptocurrency prices are being manipulated, Bloomberg reported last month. The price of bitcoin fell as much as 5 per cent after the report was published, approaching its lowest point of the year.

In December, the CFTC sent subpoenas to Tether and Bitfinex, a popular cryptocurrency exchange that is affiliated with, and shares executives with, Tether.

According to Griffin, Tether coins are created in large quantities, such as 100m. The researchers relied on the millions of transaction records that are captured on the public ledgers of all virtual currency transactions, known as the blockchain, to spot patterns.

Sarah Meiklejohn, a professor at the University College London who pioneered this sort of pattern spotting, said the analysis in the new paper "seems sound" after reviewing it this week.

Writing in a 66-page report titled "Is Bitcoin Really Un-Tethered?", Griffin and Shams argue that tether, a "stablecoin" that is allegedly backed by Dollars at a 1:1 ratio, has been repeatedly used to provide price support for bitcoin during market downturns. New analysis indicates that this is one of the most important factors that drove bitcoin's rally past year.

The researchers noted that the "bitcoin reversal did not exist before Tether was prevalent in the market and disappears during the period when Tether stops being printed". Later, a whistleblower came forward to confirm those allegations. Since exchanges often face difficulties finding the banking partners and achieving the regulatory compliance necessary to offer fiat-to-crypto trading pairs, many altcoin exchanges use tether as a proxy for physical United States dollars.

"There were obviously tremendous price increases a year ago, and this paper indicates that manipulation played a large part in those price increases".

Related News:



Most liked

White House aide apologizes for 'special place in hell' comment
He delivered them the day after Trump himself criticized Trudeau and shortly after Trump's top economic adviser, Larry Kudlow, insulted Trudeau himself.

DEAL CLOSE: Arsenal close in on Bernd Leno signing
Torreira has already given the green light to personal terms, meaning Arsenal's path to confirming the transfer is expected to be a smooth one.

Best Tweets: 'Unai Emery, Welcome to the Premier League' - Arsenal's brutal start
Oh yes, and Mikel Arteta will be on the touchline at the Emirates Stadium at the start of the new season after all... Liverpool's Premier League campaign for 2018-19 will get under way with a home fixture against West Ham United.

IND vs AFG Only Test, Day 1: Dhawan dismissed for 107
Undoubtedly, the first session belonged to the hosts, with the Afghans' Test cricket debut starting with a nightmare. But Rahane, who is standing in as captain for Virat Kohli , said there was no room for complacency in cricket.

Rebel Wilson's $3.5M defamation payout dramatically slashed
Speaking on behalf of Bauer Media, general counsel, Adrian Goss, said: "It was important for us to revisit the award of damages". Wilson was not present for the judgment but she took to Twitter the night before, saying she had already won the case.

Vivo Nex announced: Full-screen powerhouse
The Nex is eschewing the chin-and-notch trend completely, allowing for a stunning 91.24 percent screen-to-body ratio. The top-end NEX variant, on the other hand, has been listed online by Chinese e-commerce firm Suning.com.

Apple’s 2018 models likely to be cheaper than iPhone X
Now, a brand new leak appears to show us schematics for the 6.1-inch and 6.5-inch iPhones, complete with design details and sizes. However, Kelly adds that the flash will hang out on the side of the triple camera module so it's anyone's guess at the moment.

Google Doodle celebrates diverse cultures for World Cup kickoff
World soccer's governing body, FIFA, selected Canada, Mexico and the United States to host the 2026 World Cup. Canada has never hosted a men's World Cup, though it was the site of the 2015 Women's World Cup.

Kim Jong Un could give up ICBMs but keep some nuclear forces
The Singaporean prime minister said in response that he is grateful for the North's decision to hold the summit in Singapore . It comes as officials are revealing more details about meeting - the first between a U.S. president and North Korean leader.

Tyson Fury beats Sefer Seferi in comeback fight
So easy that Fury could afford to joke about it early on and glance out at a scuffle taking place in the crowd. Fury's skills are still intact, although they lacked the zip and zing of his win over Klitschko.

Jada Pinkett-Smith Says Her Grandmother Taught Her About Masturbation At 9
When Pinkett Smith asked if her daughter had understood what she had seen, Willow said: "I felt I overstepped a boundary, I wasn't meant to be there".

Red Cross launching blood drive dubbed "Missing Types"
Eligible donors can enter the drawing a second time when they register for a second donation during the blood drive period. Right now, the blood bank's stock is below that minimum, according to the release.

Teenage singing star impresses judges on America's Got Talent
America's Got Talent is an American reality television series aired on NBC , and part of the global Got Talent franchise. The only thing I can do for you young lady is give you", Mandel explained before hitting the Golden Buzzer.

Heroic raccoon scales Minnesota office building
According to the Washington Post , the animal had at one point Tuesday afternoon paused on a ledge 20 stories off the ground. Just before 3:30 Central time, the raccoon climbed up another story, then settled for another rest on a window ledge.

Four UAE soldiers killed in assault on Yemen's Hudaida
The Houthis, drawn from a Shi'ite minority that ruled a thousand-year kingdom in Yemen until 1962, deny they are Iranian pawns. The United Nations and other aid groups already had pulled their worldwide staff from Hodeida ahead of the rumored assault.